WV Press Association Staff Report
CHARLESTON, W.Va. – “I finally come to you with some good news – we are finally getting into the votes for social security.”
That’s how Austin McVey, director of Social Security for the State Auditor’s Office, began his testimony before the Legislature’s Joint Standing Committee on Pensions and Retirement on Tuesday. McVey was on-hand to provide an update on the state’s plan to extend Social Security benefits to members of the Municipal Police Officers and Firefighters Retirement System (MPOFRS).
“We have completed Elkins,” McVey said. “Paperwork is being signed by the correct people, and we have four cities that will be holding a vote in the upcoming months. That’s about 275 employees. After that, between April and July, we’re going to really hit hard the rest of them, and have all of these votes happen one after another.”
“We’re holding these votes, and we’re starting to get these employees covered by Social Security,” McVey added.
At the conclusion of McVey’s presentation, Committee Chair Se. Eric Nelson, R-Kanawha, confirmed that the deadline to complete all voting to guarantee coverage is Oct. 1, 2024.
Next up for the committee was consideration of the proposed “Emergency Medical Services Retirement System Act,” with Counsel providing a brief explanation of the proposal.
“This is a bill that has come before this committee probably half-a-dozen times at this point,” Counsel began. “It allows existing 911 employees who are employed by the counties into the Municipal Pensions plan that is run by the CPRB (Consolidated Public Retirement Board). Currently […] we allow new employees in, and this would transfer the service of existing employees from their PERS (Public Employees Retirement System) retirement plan into the new retirement plan.”
Once The explanation was complete, Del. Marty Gearheart, R-Mercer, inquired as to the “maximum potential liability” county employers would be faced with in light of additional pension obligations. To answer Gearheart’s question, CPRB Board Actuary Ken Woodson stepped forward.
“In terms of the number of potential transfers, it would be 721 if they all transferred over from PERS to EMS,” Woodson said. “(If all 721 transferred over and provided a make-up contribution) It would increase the liability by about $71 million. However, you would also have $65 million in assets coming over. So unfunded, it would create a little less than $6 million, and that would be paid over over 10 years.”
Committee members next heard from Jeffrey Fleck, executive director of the West Virginia Consolidated Public Retirement Board, Fleck spoke briefly regarding SB 237, providing a supplemental “13th payment” to certain retirees, which was passed during the 2023 Legislative Session.
“(SB 237) Provided a one-time payment of $1,500 to retirees of PERS and TERS who reach age 70 by July 1, 2023, provided they had 20 years of service, and their monthly benefit was less than $1,000,” Fleck said. “The payment was to be made by CPRB by Dec. 31 of this year.”
Fleck added that the bill also raised the monthly benefit minimum for retirees aged 70 and above with at least 25 years of service to $1,000.
“There were 4,261 retirees who received that one-time payment of $1,500,” Fleck noted. “That resulted in a cost of $6,154,759. Those payments went out in October, and the average age of retirees receiving those additional benefits was almost 82-years-old.
Sen. Nelson then briefly explained the committee’s last agenda item, saying, “The Committee received copies of two reports recently issued by PEW, as it related to state pensions. It talked about West Virginia specifically.”
Nelson then asked Fleck to add his perspective to the PEW Research Center reports.
“PEW generally doesn’t have much good to say about the fine benefit plans,” Fleck said. “But as far as West Virginia goes, they’ve been very complimentary. They put out a report three or four years ago that basically said West Virginia does it the way it should be done.”
Also providing insight was Craig Slaughter, executive director of West Virginia’s Investment Management Board.
“Our 20 year return as of June 20, 2023, is 8.1%,” Slaughter said. “That’s well about the 7.25% that we’re required to make now, and the 7.5% that we have seen for so long. The point I want to make is that the average state pension plan out there in the country is less than the 7.25%. That 8.1% that we have is in the top 15 states in the country.”
The West Virginia Legislature’s 60-day Regular Session is scheduled to begin on Wednesday, Jan. 10, 2024.
